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17/12/2014

The Presidential Practice Direction in Holiday Pay Claims

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The Presidential Practice Direction in Holiday Pay Claims

One Problem Solved

The Problem

In my previous article about the decision of the EAT (Langstaff J) in Hertel (UK) Ltd v Woods & Others, AMEC Group Ltd v Law & Others and Bear Scotland Ltd & Others v Fulton & Others (UKEAT/0160/14, UKEAT/0161/14, UKEATS/0047/13), I highlighted a practical problem for holiday pay litigants on both sides, and also suggested a solution.

The practical problem arises from Langstaff J’s decision on the meaning of “series of deductions” for the purpose of s.23 ERA 1996. The EAT held that the legislative context indicated that a series of deductions would be broken if punctuated by a gap of more than three months. That aspect of the decision is highly controversial, but although Langstaff J gave permission to appeal to the Court of Appeal on the point all of the claims have now settled. The point is of such importance that it will doubtless reach the Court of Appeal in another case sooner rather than later.

In the meantime, Langstaff J’s reasoning not only has the potential to limit the recoverable arrears of underpaid annual leave, it also means that in many cases the safest course for claimants with ongoing claims would be to issue fresh claims every three months in order to avoid any argument about limitation.

That might be the safest course of action, but it would also come at a considerable cost since additional tribunal fees would be due on each occasion (subject to remission), together with the need to comply with the early conciliation procedure. The onerous cumulative liability for tribunal fees is not just a matter of concern to claimants, it should be of concern to respondents too, since successful claims are likely to result in an order that the respondent should pay the tribunal fees under rule 76(4) of the ET Rules. That result would also be necessary to ensure full compensation for breach of an EU right in accordance with Marshall (No.2) v Southampton & South West Hampshire AHA [1993] ICR 893, ECJ.

In my previous article, I suggested that the best solution for both sides would be for the parties to agree, with the endorsement of the tribunal, rolling three month amendments in accordance with the principles in Prakash v Wolverhampton City Council (UKEAT/0140/06/MAA).

 

The Presidential Practice Direction

The Presidential Practice Direction issued on 11th December 2014 adopts a very similar approach and prescribes a pragmatic and cost-effective way forward.

Judge Doyle, The President of Employment Tribunals (England and Wales), referred to the decisions in British Airways v Williams [2012] ICR 847, British Gas Trading Ltd v Lock [2014] ICR 813 and Bear Scotland, Hertel, Amec and also to the authorities of Prakash (above) and Okugade v Shaw Trust (UKEAT/0172/05) on amendment, before setting out the following six steps for litigants.

 

1.            A claimant or group of claimants who have previously presented a claim or claims in respect of a complaint of alleged non-payment of holiday pay may, if so advised, apply to amend the claim or claims so presented in order to add a further complaint or complaints of alleged non-payment of holiday pay that have accrued or arisen after the presentation of the original claim and which could not have been included in the original claim or claims.

2.            They may do that, if so advised, instead of presenting a new claim to the Tribunal.

3.            Any such application to amend must identify clearly the original claim that is sought to be amended by case number, claimant(s) and respondent(s), and it shall set out the amended particulars of the claim to include the additional dates or periods of alleged non-payment of holiday pay, the basis of the complaint and the amount claimed.

4.            Any such application shall be copied to the respondent(s) by the claimant(s) at the same time as making the application. The claimant(s) shall invite the respondent(s) to provide any written comments upon the application to the Tribunal within 7 days.

5.            After that period of 7 days the application to amend will then be considered by a judge in accordance with the usual principles for the amendment of a claim (i.e. the well-known Selkent principles).

6.            Any party or representative wishing to make representations for the further conduct of such claims should do so on application to the President.

Comment

The practice direction formalises the “rolling amendment” approach and should lead to a smooth and efficient mechanism by which that can be achieved.

Some concerns have arisen regarding point 3, and the particulars required to be supplied by claimants in their applications to amend. It might often be very difficult for claimants to supply dates, periods or amounts of alleged non-payments of holiday pay in advance of disclosure of documents, except in rather general terms. While the Respondent could reasonably be expected to be in possession of detailed payroll records and to understand the basis of each payment, it is not unusual for claimants to be unsure of the precise dates or payments in respect of holiday pay, or the manner of their calculation. It is likely that claimant solicitors will make representations to the President on that point.

 

Mark Whitcombe

16th December 2014

Mark Whitcombe was junior counsel for the claimants in the appeals in Hertel and Amec, led by Michael Ford QC.

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